Investing your money, getting it to work for you, is something that most adults think about. Get involved in the right investments and you can set yourself up for a comfortable life when retirement comes knocking.
If you are totally new to investing, it doesn’t have to be as complicated as it seems. Instead, use a few basic strategies for investing and you can jump right in. Here are some of the best investment strategies to follow if you are a newcomer to the world of investing.
Active Investing
Some people can’t stand to be involved in trading in a passive way. They have to be involved, making trades on a regular basis. This is what is called ‘active trading’ and involves attempting to opportunistically capitalize on trends and changes within the market. On a crypto trading community like Kaizen trading, members can study market data and capitalize on short-term trends.
There are several strategies within the active investing niche. Strategies can include event- and momentum-driven strategies, spread or swing trading, or those based solely upon pricing. This kind of investing takes knowledge of trends and pricing but can wind up being lucrative if you get a feel for movement in the market.
Buy-and-Hold
At the complete opposite end of the investment spectrum is buy-and-hold investing. Some people work best when there is a clear label, and this is as clear as it gets. This kind of strategy believes that investments perform best when they are given months or years to grow.
Dips and drops in the market don’t really have an impact on the strategy because investors believe that the potential over the long term is what matters most. It might be a rising young stock or broad index funds, but holding means saving time and money that short-term active investing would entail. It also tends to be a lot less stressful as well.
Retirement Account
A simple way to get started investing is through a retirement account. Whether it be an individual retirement account (IRA), a brokerage account, or a 401(k), it is a fantastic start. There is also a good shot that you already have one of these accounts through an existing employer, making active contributions with every pay period.
That said, this is one of the most hands-off investment strategies out there. IRAs might allow you to have more choices than something like a 401(k), but these are meant to be limited. The goal is to accumulate slowly over time, not score a huge win in the short term. The goal here is also quite clear: retirement.
Dollar-Cost Averaging
When it comes to short-term investing, one of the biggest challenges is timing the market and doing so on a consistent basis. Investors who want to try a short-term investing approach but don’t really know what the right entry point is should consider a strategy known as dollar-cost averaging.
The idea here is to spread fund or stock purchases out over time, buying roughly the same amount at equal intervals. The idea here is to “smooth” out those purchases over time so that you are buying more shares when the price is at its lowest and buying less when the prices are up.
Eventually, over time, everything averages out to a better entry price. It also equates to reducing the overall impact of market volatility as it relates to your portfolio. It is more of a long-term strategy compared to short-term investing even though dollar-cost averaging shares traits and ideals for both. There are many more strategies to look into in order to find the best fit.
